Shopping Cart Abandonment Practices of the Internet Retailer 1000 Companies by Megan Ouellet, Director of Marketing, Listrak October 12, 2011 Shopping cart abandonment rates are on the rise. The average abandonment rate jumped from 71% to 75% during the first six months of 2011. Why? More consumers are using online carts to compare prices before making a purchasing decision, both on their computers and smartphones. For others, carts are abandoned due to high or unexpected shipping costs, simple interruptions, etc. While some customers do return to complete the purchase, many more remained lost. We keep our finger on the pulse of the ecommerce industry through frequent longitudinal studies and industry quick polls. Our latest research study was on the shopping cart abandonment habits of the Top 1000 Internet Retailers, as identified by the and IR. This whitepaper contains the results of that study along with recommendations. Methodology This is our third shopping cart abandonment study. It differs than the first two in that we not only shopped and abandoned Internet Retailer sites but the as well. The methodology was the same we shopped 97.3% of the top 1000 sites (97.2% from the and 97.4% from the ), excluding sites where a military ID or exclusive membership was required and sites that were no longer functioning. During the checkout process we noted where each company is requesting the shoppers email addresses and whether or not the payment information is on the same page. Items were added to carts, the checkout process was started, and the carts were then abandoned before completing the purchase. The same information was added to each checkout page first and last name, email address, mailing address, and phone number. We then tracked the cart abandonment campaigns received, noting the time, personalization, dynamic merchandising, offers, and number of emails if a series was sent. Below are the detailed results.
Part 1 Number of Messages How many online retailers are recovering revenue with shopping cart abandonment email campaigns? 14.6% of the IR-1000 companies sent at least one message - 18.7% of the, which is a 42% increase from our last study released in January 2011, and 10.7% from the second 500. 14.6% The increase in the is a sign of the times as more and more retailers are implementing shopping cart abandonment strategies. We re happy to see the increase, but we re still surprised to find that less than 2 of the top 1000 ecommerce sites have implemented a solution at this point. Another interesting note is that the mid-sized internet retailers (501-1000) are closely keeping up with the with cart abandonment campaigns; an indication that this strategy is feasible and not just for the big boys. 18.5% 10.7% How many emails are online retailers sending? An astounding 77.5% of all shopping cart abandonment campaigns received were single messages 8 of the and 75% of the. And 15.8% - 16.7% from the and 15% from the sent two emails. However, 1 of the and only 3.3% of the sent the all-important third message. Our recommendations: Think three reminders are too many? Think again. Sending a third message takes little time, money, or resources and we ve seen them convert at nearly the same rate as the second message of the series. You ll simply make more money. Number of messages sent 6.7% 8 3.3% 15.8% TOP 500 16.7% 77.5% 1 2 3 SECOND 500 75% 1 15%
Part 2 Timing of Messages What is the timing of the messages? Message 1: Arguably the most influential factor of shopping cart abandonment campaigns, the timing of the messages differed greatly between the and Second 500. Only 51.1% of the sent the first remarketing campaign within 24 hours of the abandonment whereas 73.1% of the reached out in that time frame. In fact, 40.4% of the messages were received within an hour of the abandonment, compared to only 14.4% of the. Message 3: The third message had an even greater discrepancy. Only 33.3% of the sent the third message within 72 hours of the second message while 6 of the Second 500 reached back within three days. 14.4% 40.4% 36.7% 32.7% 2 11.5% 8.9% 49-72 HOURS 1.9% 49-72 HOURS 33.3% 49-72 HOURS 14.4% 13.5% 66.7% Message 2: The second message produced similar results. Only 38.9% of the 2 sent the second message within 24 hours of the first whereas 46.1% of the sent within that time frame. The biggest discrepancy between the two groups was the 25-48 hour period, where the sent 27.7% of messages in this period compared to only 7.8% of the. 2 5.5% 15.4% 2 49-72 HOURS 33.4% 30.7% 4 22.7% 7.8% top 500 second 500 16.7% 49-72 HOURS 30.7% 49-72 HOURS 16.7% 15.4%
Our recommendations: Always test to find what works best for your audience, but we recommend sending the first message within three hours (or even one hour) of the abandonment so you reach customers while they re still contemplating the purchase. We ve found that emails sent within one hour of abandonment have the highest open and click rates but emails sent three hours after the abandonment have the highest Average Order Values. We ve also seen retailers double their campaign ROI simply by moving the first message deployment from 24 hours to three hours after the abandonment. The second message should be sent 24-48 hours later and the third message 48-72 hours after that. That way, you ll reach out three times within six days. Waiting too long gives customers the opportunity to purchase the items elsewhere. What is the cadence of the messages? Email cadence refers to the deployment pattern of a series of messages. It is just another way of looking at the information supplied above. Below is the cadence for the : MESSAGE 1 MESSAGE 2 MESSAGE 3 14.4% 5.5% 36.7% 33.4% 2 22.7% 8.9% 49-72 HOURS 16.7% 49-72 HOURS 33.3% 49-72 HOURS 14.4% 16.7% 66.7% Below is the cadence for the : MESSAGE 1 MESSAGE 2 MESSAGE 3 40.4% 15.4% 2 32.7% 30.7% 11.5% 7.8% 2 1.9% 49-72 HOURS 30.7% 49-72 HOURS 2 49-72 HOURS 13.5% 15.4% 4
Part 3 Content and Messaging MESSAGE ONE OVERALL OFFERS Are online retailers relying on discounts in their shopping cart abandonment campaigns? Some online retailers are reluctant to include an offer in their shopping cart abandonment campaigns because they re worried that they ll be training customers to abandon carts and wait for the discounts. Including special offers in your shopping cart abandonment campaigns can work to your advantage if you take a strategic approach; but it can also decrease your profit margin if you aren t careful. 27% 8.2% 48.6% 16.2% Offers in Message 1: 41% of the offered a discount in the first message compared to 56% of the. top 500 free shipping $ amount % off 46% 41% 56% 33.3% 5 $5 OFF $10 OFF 16.7% $20 OFF Types of Offers in Message 1: 14 companies offered free shipping in the first message, 40 offered a percentage off, seven offered a dollar amount off, and five had a miscellaneous offer, such as 5 off a second item or $5 flat rate shipping. 76 didn t include an offer or discount. message. 27.8% 55.5% 5% OFF 1 OFF Offers in Message 2: 56% of the offered a discount in message two, a 36.5% increase over message one. 69% of the offered discounts in the second message, a 23% increase over the first message. 16.7% 15% OFF 61% 56% 69%
Types of Offers in Message 2: This chart shows actual offers across the first two messages. Only 19 of the second messages received included an offer: MESSAGE 1 MESSAGE 2 Offers in Message 3: 33.3% of the and 8 of the Second 500 offered a discount in the third message. $5 flat rate shipping 5 off extra print 2 off $5 flat rate shipping 5 off extra print 62.5% 33.3% 8 Types of Offers in Message 3: Only five of the third messages received included offers. This chart shows the actual offers across those the three-message series: MESSAGE 1 MESSAGE 2 MESSAGE 3
What s interesting to note here is that the vast majority of third messages from the do not have an offer, while the reverse is true for the. And, in the first message, both groups were almost equally dispersed between offer and no offer. If you re willing to offer a discount in the first message, why not carry it across all three messages? Our recommendations: We recommend implementing a discount ladder to maximize your profitability. Many times an offer isn t needed in the first message as a simple reminder of the products in the cart is enough to prompt customers into action. However, a nominal discount in the second message can help entice shoppers who are still considering the merchandise to complete the purchase. And, for shoppers who still haven t acted, a larger discount in the third message is typically too tempting to pass up. A discount ladder allows you to apply the larger discounts only to customers who need them so you ll make more money on the transactions completed in your first two messages. Are emails personalized with customers names? Only 27.4% of the first messages received included the customer s name in the email copy even though 10 of them had access to the information from the checkout page. Are emails personalized with images of items left in cart? Another surprise was that only 38.7% of the first emails received included images of the merchandise left in the carts. 27.4% 26.6% 28.8% 38.7% Our recommendations: Shopping cart abandonment messages are extremely personal messages, so avoid lumping all of your valuable customers into the Dear Valued Customer category. Calling your customers by name really helps personalize the interaction. If you have the information, use it. Our recommendations: What is more tempting to a customer than opening an email and seeing the merchandise they want to buy? In many cases, just seeing the items again is enough to prompt customers into completing the purchases, even without a discount. Again, you have the information so use it.
Part 4 The Checkout Process Where are online retailers capturing customers email addresses? 97.5% of the Top 1000 retailers that send remarketing campaigns capture customers email addresses on the first page of checkout. 97.5% 2.5% 97% 3% 98% 2% page one page two But that percentage drops slightly to 93% when looking at the Top 1000 retailers that do not send remarketing campaigns. 93% 89% 96.3% 5.3% 1.4% 2.8%.1% 7.3% 2.8%.6%.3% 3.4% 3% 1 2 3 4 5
Where are online retailers capturing payment information? The biggest surprise of the study was found here. Of the online retailers that send remarketing campaigns, only 15.5% of the companies request payment information on the same page as the email address whereas 92.3% of the companies request the information on the same page. 1-1000 1-500 501-1000 56.4% 43.6% 84.5% 15.5% 92.3% 7.7% same page as email address different page than email address Of the Top 1000 companies that do not send remarketing campaigns, the numbers are more closely aligned. 29.4% of the companies and 33.3% of the request the information on the same page. 1-1000 1-500 501-1000 68.3% 31.7% 70.6% 29.4% 66.7% 33.3% same page as email address different page than email address Our recommendations: Email addresses should be the first thing you ask for during the checkout process. After all, you can t send a remarketing campaign without one. The further in the process you request the information, the more chances customers have to abandon the carts. A Few Surprises In addition to the expected email reach backs, we also received three follow up phone calls after the carts were abandoned. All three calls were made within 1 ½ hours of the abandonment and all three were made by representatives asking if we experienced technical problems during the online checkout process and offering to complete the sale for us over the phone. Two of the three companies sent the first remarketing email message immediately after the phone call, and the third sent the email four hours after the call.
We also received one direct marketing piece in the mail and; surprisingly, the company that sent the catalog did not send a follow up email. We were also surprised at the subject lines of the messages. We expected to see more subject lines announcing the offers, such as You left products in your cart. Buy now and save $10. But most of the subject lines were simple reminders, such as the few examples below: Did you forget something? Having trouble checking out? Hurry, before it s too late! Thank you for your recent visit. Where did you go? Oops.Was there a problem checking out? You left some items behind. Ode to an abandoned cart. Your purchase. Final Thoughts Shopping cart abandonment campaigns work. Once they are set up, they run in the background with little maintenance required. These campaigns are on an upward trend with a 42% increase in the this year alone. If you don t already have a solution, it s time to implement one. In the next few weeks, we ll release a look-book containing samplings of the emails received. The emails varied greatly from simple text-based reminders to intricate dynamically-populated personalized messages. We re here to answer all of your questions on shopping cart abandonment. Visit us at www.listrak.com to learn more. About Listrak Listrak is an email marketing firm providing the solutions, software, and expertise to optimize the value of email. Listrak works with clients like Birkenstock Central, Swell, Vintage Tub and Bath, Chiasso, and Active Ride Shop to develop engaging shopping cart abandonment remarketing campaigns that go beyond the inbox to the individual, to deliver the extra percent in effectiveness and ROI. Visit www.listrak.com to learn more. 877.362.4556 www.listrak.com